Automakers To Submit Plans To Congress

WASHINGTON (AP) - Detroit's automakers, making a second bid for$25 billion in funding, are presenting Congress with plans Tuesdayto restructure their ailing companies and provide assurances thatthe funding will help them survive and thrive.

U.S. automakers are struggling to stay afloat heading into 2009under the weight of an economic meltdown, the worst auto sales indecades and a tight credit market. General Motors, Ford andChrysler went through nearly $18 billion in cash reserves duringthe last quarter, and GM and Chrysler have said they could collapsein weeks.

Top executives from the Big Three failed last month to convincea skeptical Congress that they were worthy of $25 billion in loans.House Speaker Nancy Pelosi, D-Calif., and Senate Majority LeaderHarry Reid, D-Nev., ordered them to outline major changes,including the elimination of lavish executive pay packages andassurances that taxpayers would be reimbursed for the loans.

All three companies are filing separate plans. Congressionalhearings are planned for Thursday and Friday.

"I believe the industry will make a compelling case for bridgeloans that will allow the companies to return to firm financialfooting," said Sen. Carl Levin, D-Mich.

GM will outline efforts to negotiate swapping some of thecompany's debt for equity stakes in the automaker, either shares orwarrants for them, said two people briefed on the company's plan.

With eight separate brands, GM will also discuss efforts to shedbrands but it would prefer to sell them instead of shutting downPontiac, Saturn or Saab, said one of the people briefed on theplan. Killing off brands, like GM did with Oldsmobile in 2004,would require cash the company doesn't have, the person said. Thepeople briefed on GM's preparations didn't want to be identifiedbecause the plan hadn't been completed.

Some members of Congress have urged the Big Three executives totake major pay cuts as part of the deal. Chrsyler Chief ExecutiveRobert Nardelli said he would work for $1 a year, and a similarcommitment is expected from GM CEO Rick Wagoner. Ford plans toinclude a pay cut for Ford CEO Alan Mulally, although the size ofthe cut was not immediately available.

Chrysler is expected to outline changes that would include aswap of debt in the company for equity stakes and reductions insome vehicle models, according to a person who was briefed on theplan. The person spoke on condition of anonymity because thediscussions were private.

Ford, meanwhile, is not expected to immediately seek the loans.Mulally told Congress last month that the company would only seekfunding if the U.S. market continued to deteriorate. He mortgagedfactories to arrange a $23.4 billion credit line shortly aftertaking over the company in 2006 and he has said Ford can last atleast until 2010.

Cash stockpiles at GM and Chrysler are dangerously close to theminimum amount required to run the companies, meaning they couldhave trouble paying all their bills by the end of the year.

GM, according to its quarterly report filed with the Securitiesand Exchange Commission, owes creditors $45 billion and it must paymore than $7.5 billion early in 2010 to a United Auto Workers trustfund that will take over retiree health care payments.

Ford owes more than $26 billion, with $6.3 billion due to itsUAW trust fund at the end of 2009. Chrysler, a private company,does not have to open its books, but its CEO, Nardelli, has said itwould be difficult for the company to make it without federal aid.All three likely are negotiating with the UAW for delays inpayments to the trusts.

The companies are expected to seek other concessions from theUnited Auto Workers, including the elimination of the much-malignedjobs bank in which laid-off workers keep receiving most of theirpay.

Alan Reuther, the UAW's legislative director, declined to saywhat kinds of concessions the union might take but said "werealize that all stakeholders need to come to the table to dowhat's necessary to ensure the viability of the companies. We'reprepared to do our part."

The plans to Congress may also discuss more symbolic issues suchas the use of corporate jets. During the congressional hearings,the executives were sharply criticized for traveling to Washington,D.C., separately by private jets.

Ford said that Mulally will travel by car when he returns laterin the week. Chrysler and GM said their CEOs will not fly bycorporate jet, but neither company has said if the executives willfly on commercial airlines or drive.

All three companies are expected to resist calls for bankruptcy.The executives said last month bankruptcy cannot be an optionbecause no one would buy a car from an automaker that may notsurvive the life of the vehicle.

Auto executives plan to discuss the plans at a hearing beforethe Senate Banking Committee on Thursday and the House FinancialServices Committee on Friday.

Commerce Secretary Carlos Gutierrez said in an interview thatthe plans need to address some of the key structural issues facingthe industry, such as costs, their debt structure, their dealernetwork cost and their product lines.

Gutierrez said auto industry officials have told him they planto present "strong plans" but he had not been briefed on thedetails.

Online Public Information File

Viewers with disabilities can get assistance accessing this station's FCC Public Inspection File by contacting the station with the information listed below. Questions or concerns relating to the accessibility of the FCC's online public file system should be directed to the FCC at 888-225-5322, 888-835-5322 (TTY), or fccinfo@fcc.gov.